Transcript:

NASIR: Welcome to our podcast where we cover business in the news and add our legal twist to that business news.
My name is Nasir Pasha.
MATT: And I’m Matt Staub.
NASIR: And, boy, do we have a story today.
MATT: Yeah, I mean, it just keeps evolving. It’s far from final but, I mean, kind of one of the big things that we were waiting to hear on happened.
Let me rewind a little bit and let’s go to the beginning – well, not the very beginning because Roger Ailes has been working with FOX for a really long time so we’re not going to maybe start that far back but I guess we’ll start with the actual complaint that was filed.
NASIR: Yeah, let’s do that.
MATT: That was what? July 6th and it was Gretchen Carlson, another previous FOX employee, filed a lawsuit against Roger Ailes – just Roger Ailes.
NASIR: She was that co-host at Fox & Friends if you ever watched that. Did you ever watch that show?
MATT: No, I don’t watch any of those shows.
NASIR: I actually find FOX News entertaining – not for news purpose, just entertaining in general. But, anyway, go ahead.
MATT: Yeah. I mean, I guess there are some questions of whether she could consider some of these people her friends based on the title of the show, especially Steve Doocy.
NASIR: I don’t know his name, but it is spelled D-O-O-C-Y so I’m not sure how else to pronounce that.
MATT: She worked on a bunch of different segments and shows but you mentioned FOX & Friends but she was an employee of FOX and Roger Ailes is the chairman and CEO of FOX News so that’s where we’re starting. But it’s something to say right off the bat is the lawsuit’s only against him and not against 21st Century FOX or anyone else – just Roger Ailes. That’s something we’ll circle back around to.
So, she files this complaint and it centers around just basically a bunch of repeated instances of sexual harassment. I’m not as familiar with Gretchen Carlson’s career as you might be having watched the different shows but – at least what’s alleged in the complaint and what I’ve read elsewhere – she was pretty likeable, pretty successful at what she did – I mean on the shows she was on.
NASIR: I suppose. I mean, according to her, I mean, she was on a pretty popular show. But I think she was replaced by Hasselbeck – I forgot her first name.
MATT: Elizabeth Hasselbeck?
NASIR: Yeah, Elizabeth Hasselbeck – either replaced or pushed aside, so to speak.
MATT: I think the allegations in here might be part of the reason why.
NASIR: Yeah.
MATT: So, she was working with FOX – you know, these different shows. We’ll link the complaint because there’s more detail in there and we’re not going to go through all the different allegations that she is asserting against Roger Ailes – and, I guess, at this point, we should say they are just allegations – he’s denied everything. At this point, you know, there has not been any sort of responsive pleading to the complaint yet. So, at this point, it is strictly allegations so we will say that so we won’t get in trouble.
NASIR: You won’t get in trouble. I’ll say it all day.
MATT: I think it all kind of started with – or one of the things it started with – was her co-host which is the Steve Doocy. There’s a couple of instances of him doing things to her I think specifically putting his hand on her and putting her arm to shush her during a live telecast – you know, amongst other things. She had problems with that so she approached Ailes and just wanted to inform him of what was going on and that’s really where it kind of started and that, based on what’s in the complaint, he didn’t take her too seriously – not only that, that’s when some of the sexist remarks from him or gestures started popping up. He specifically responded by calling her a “man-hater” and “killer” – I don’t know why the killer aspect of it – and telling her she needs to get along with the boys. And so, not only were those verbal jabs there, there’s some form of retaliation that’s happened, too. We were alluding to this earlier. She didn’t get as many segments as she used to or I guess high-profile interviews as she used to. Basically, her presence on the network wasn’t as seen as much as she used to before. She got reassigned to different times, different segments, things like that. But she kind of just continued to plug along. I mean, according to her – or at least in the complaint – her show still got good reviews or good ratings. Everything was fine. She just kind of took it in stride. We don’t know the time when all these different instances of what Ailes did happened, but there was more sexual harassment that’s alleged that went on for years, I guess. And then, eventually, I think in 2015 – I’m trying to see – yeah, in September 2015, she again sought to bring into this treatment of retaliation for these complaints and that’s when he stated – this is one of the more damning things is – “I think you and I should have had a sexual relationship a long time ago and then you’d be good and better and I’d be good and better.”
NASIR: Not only does that not make any sense; it also is very creepy.
MATT: It’s in quotes so I guess that’s what was stated.
NASIR: Allegedly.
MATT: You know, alluding to you can make this problem go away by certain things. Basically, she refused all this stuff the entire time, you know, continued to be retaliated against. Her compensation got reduced which is kind of crazy. It’s not something you see too often, especially for a high-profile individual.
NASIR: She also explains how she was basically given her own show – granted it was in the afternoon or something so it may not be as popular as primetime or in the morning – I think that’s when FOX & Friends is at – and she even talks about how she actually had to do more work because, before, she was a co-host, but now she’s solo and yet, somehow, her salary was decreased. That’s true, but I wouldn’t be surprised if that’s not uncommon when it comes to television, though. I know I’m a radio celebrity but I don’t know much about TV.
MATT: Well, I’m just thinking, if she’s as good as – or her work is – as good as she says it is, you wouldn’t think that would result in a decrease in pay but I guess that’s neither here nor there.
NASIR: Well, I guess that’s the allegation.
By the way, these sexual harassment allegations and occurrences happen all the time. I mean, the statistics are pretty bad. Let’s see. I think it was in 2015, 27,000-plus sexual harassment claims were filed just with the EOC and the EOC is just a slice of the pie.
MATT: And that’s just reported.
NASIR: That’s just reported. You mentioned that’s one of the problems is that, if this kind of behavior does occur, imagine how difficult it is for the person that’s being the victim of this to actually report it to somebody. Now, let alone someone about the CEO of the company. I mean, I just can’t imagine what a person would do when, you know, whether it’s a big or large company but especially if it’s a small company and the owner or the president or CEO is the one that’s actually a predator, so to speak, in this regard.
MATT: Yeah, let me nail down a couple more points in the timeline here because it is pretty interesting. It really put FOX in a predicament here.
So, her contract was not renewed – June 23, 2016 – her contract was not renewed. She filed this lawsuit July 6th. The thing to know about – I mean, people that are familiar with FOX, this isn’t surprising but Ailes is a pretty big figure on the Republican side of things. Obviously, we had the Republican National Convention coming up soon after this complaint was filed. And so, FOX was in a very difficult situation on how to approach this because it’s just way too many things going on and, as of today – the 21st and I think it was announced today or possibly yesterday.
NASIR: Which is surprising in a way because, in fact, the rumors were that he was going to step down after the convention but today is the last day or the second? I know Trump is speaking today so it’s definitely nearing the end. If it’s not the last day, it’s like the second to the last day of the convention. So, it is kind of surprising that they chose today to do so because it’s definitely going to… or on the other hand, maybe people are going to be more concerned about Trump news than FOX News’ CEO stepping down. I don’t know.
MATT: Yeah. I mean, it’s probably right but it still does make things…
NASIR: But we did explain that FOX News tends to be on the conservative side of things, right? Did we explain that?
MATT: I didn’t explain it but I said, “I think people are familiar with it.”
NASIR: Just to clear that up.
MATT: That’s kind of the rundown of the facts – at least from the beginning from what we stated until present day now on the 21st. And so, I guess the battle is on, you know, on a greater scale how, I guess, FOX wants to handle this and they’ve handled it to some extent but, with Ailes as well, I mean, he’s obviously got to handle it.
NASIR: Well, FOX did launch an investigation even though they are not a defendant in this case and I think that’s really when things got interesting. We kind of talked about what happened in the complaint when that was filed what she alleges but it really started to heat up – and as these things tend to do – is about more than additional women came out to discuss their experiences.
MATT: Yeah.
NASIR: This started to come out through FOX’s investigation. We’ll talk about it in a second why FOX investigated and why it was important for them to do so but, just for a second, there was six of whom have been identified, including a very popular host at FOX which is Megyn Kelly. I think it’s at that time when that became public that everything just started to be clear – that Roger Ailes is on his way out – and that’s probably why he’s been pushed out because I think that, if there wasn’t – again, I’m just speaking to the reality of it of how other people’s impressions are – is that, when Megyn Kelly who currently works there and does have some credibility in her position at FOX News that her saying her experiences with Roger Ailes does really pose a problem for FOX because now they know that they have an alleged sexual harasser, multiple victims, and they have to choose, “Now, do we keep him and risk liability to FOX?” when that’s what they’re doing by keeping him on.
MATT: Pulling it back into the Trump aspect of it, again, for people that recall, I mean, Trump kind of verbally attacked her.
NASIR: Megyn Kelly? Oh, that’s right.
MATT: Yeah, those early debates. The interesting thing is I think people wanted her replaced as the moderator for the debates and Ailes stood up for her and said she wasn’t going to be replaced.
NASIR: That’s true.
MATT: She’s also coming out now saying that he did unwanted sexual advances towards her. So, it’s an interesting dynamic how he did show some support towards her – you now, however many months ago that was – but now she’s coming out and saying, “This isn’t any surprise because the same thing happened to me – maybe not to the level that it did with Gretchen Carlson but it’s there.” You mentioned, there’s other women that have come out as well. No surprise. That’s a pretty common thing when these high-profile people have, you know, the Bill Cosby thing is a perfect example. That was a little bit different in what was alleged but same sort of idea.
NASIR: That was also rape, allegedly.
MATT: Different.
NASIR: There hasn’t been rape alleged.
MATT: No, no, no.
NASIR: Here’s the thing. I mentioned how difficult it is, especially in these circumstances, but I do want to talk about when a supervisor, especially if the supervisor is the one that commits these acts. Whether it’s a supervisor or not, imagine the victim. They’re going through embarrassment and they don’t know how to respond but there’s a reason why California, for instance, puts in an actual strict liability on behalf of the employer if a supervisor actually commits the act. That’s not the case around the country. There was actually a Supreme Court case that talked about, basically, they took federal regulations and the standards of sexual harassment and they made it so that it was automatically put on to the employer. The Supreme Court says, “No, it’s not automatic.” There has to be some kind of notice given to the employer that this could be going on or there has to be some kind of just complete disregard to the safety of their workforce. And so, this is where it comes into play and that’s why FOX investigated – it’s that they were – and this is standard protocol in any big company, at least what someone should do – if there’s an allegation and it has even the ounce of credibility, then you should do internal investigation and that could be either privilege or not – depending upon how you do it – and that is a way for you to prevent future liability. If you find that a person may have harassed somebody – whether it’s a supervisor or not – and you keep quiet and you allow that person to remain in the employment, then that’s a big problem and, frankly, obviously, any court would want to impute liability for that to the employer.
MATT: Yeah, and you have to take this seriously, obviously, as the employer. I mean, there’s stuff they should have been doing and I assume FOX probably had some sort of anti-harassment policy in place, I would hope, you know, sexual harassment training as well so kind of on the preventative side. But, yeah, I mean, once an allegation is made, the employer has to look into it. You can’t just brush it off. Obviously, in this case – well, I don’t know – I would think, in this case, let me ask you this, the higher profile the individual is, do you think that, I mean, obviously, employers need to take all of them seriously but do you think an employer looks at that with more scrutiny or less scrutiny?
NASIR: Again, I think it’s the credibility of it because, if it’s someone high profile, then it’s not uncommon to have and this is a big problem. Talk to any employment law attorney – whether they’re a plaintiff or a defendant – there’s a lot of people that ruin it for everybody in a sense there are people that make allegations of sexual harassment that are false. Of course, this plays into a common defense tactic of basically a victim that was actually welcoming these advances but is trying to extort their employer or the person for money. Unfortunately, it does happen. And so, from an employer’s perspective – and as you being a business owner – you’re in a difficult position and any kind of allegations should be taken seriously. At the same time, you do have to be able to weed out the non-credible ones as well. Even the ones that are not credible doesn’t mean that you can’t do an investigation at least to rule out the possibility and I think that’s the most appropriate step.
MATT: As you mentioned, it’s so critical – as with Ailes here – on the supervisor manager level because that’s when it can really be an issue for the employer. I mean, not that it wouldn’t be an issue otherwise but that’s when it really… all of it needs to be taken seriously but the supervisor management level is like double seriously.
NASIR: Absolutely.
MATT: That’s my legal take on that.
NASIR: It’s doubly bad according to Matt.
Well, let’s talk about what is sexual harassment. I think that’s a tough one to describe because states have its standards and there’s a federal standard as well but they pretty much all come down to one word which is “unwelcome” – that is unwelcome sexual advances, unwelcome comments, unwelcome physical touching – and a lot of litigation that is surrounding a type of sexual harassment that is not obvious in a sense that the victim thought it was not okay but the other person thought they were just joking around and it was all in good fun. Those types of circumstances we’ve seen in different workplace environments I’m sure personally and the real question is did the person – the possible victim – was it unwelcome? Did they do anything to incite or to solicit the behavior? And that’s not a very easy thing to detect or investigate.
MATT: And it’s clearly a situation or it’s a subject where you, as the employer, can make things worse.
Let’s say you have an instance of these unwanted sexual advances, you can escalate it to a whole other level by retaliating based on that and I’m not talking necessarily by the reporting but, like in this case with Ailes – I guess that was not a good example because she did come to him initially in regards to a co-worker but let’s say that part with Steve Doocy wasn’t there, she was just talking to Ailes and there was some sort of – I shouldn’t use this example – let’s say there was a manager, an employee is talking to the manager or the supervisor and there’s unwanted sexual advances by the manager to the employee and it’s very clear that the employee doesn’t want this to happen and then there’s retaliation where the supervisor demotes them or does some sort of retaliatory action, I mean, that’s a situation where you can clearly make it worse.
NASIR: Usually that occurs in a firing or a demotion of salary or a deduction of salary, demotion of position.
MATT: Worse treatment, yeah. There’s varying levels. All of it’s bad. To me, not to pull The Office into this but the one episode where they watch the sexual harassment training and…
NASIR: It’s a great episode.
MATT: The video that they’re showing. They’re making fun of it there. They’re kind of like, “Oh, it’s not always obvious.” To me, sexual harassment is pretty obvious, I think. That’s just my take.
NASIR: I think you’re right. I think, in general, it’s mostly obvious. There’s certain cultural environments that certain things are acceptable and it gets tricky. Think about if you worked at Playboy Magazine or if you worked on the Howard Stern Show or these different environments that the cultural environment may be different than other work environments and the standards of conduct may also be different but that doesn’t mean that the same laws don’t apply.
MATT: Right.
NASIR: And so, what may be so-called unwelcome conduct may or may not be as clear. And so, it’s an area of a law that definitely the standards of unwelcomeness are very case by case. I think there was a common standard in most office environments that can be referenced and that’s why these training videos, of course, put up some kind of standard as, you know, it’s kind of a catch-all and that’s the kind of work environment you do want to create. I know it may seem boring and I think even The Office kind of makes fun of it like you can’t joke around at all because everything’s offensive and that’s not exactly it either. It’s just being able to be aware, engage unwelcomeness which is, again, sometimes it’s not obvious.
MATT: Not to poke fun at the situation but there’s a bunch of classic parts from that episode, the end of which is when Michael refuses to say “that’s what she said” and Jim keeps kind of prying and probably gets him to say it and then, yeah, I might go actually watch that as training after this.
NASIR: Actually, yeah, I mean, when we do training, that’s all – we just play that episode and then walk away.
MATT: It speaks for itself.
NASIR: It speaks for itself.
Speaking of training, training is actually recommended across the board across the nation. There’s no hurt in it, right? Especially when it comes to employer liability, if you can show to a jury that, “Hey, we made efforts to prevent this from happening,” then that’s going to be very favorable. But, in California, where, for example, it doesn’t matter whether you did anything, if your supervisor does that, you’re strictly liable, they actually have a requirement for training for certain employers that have employees of fifty or more. It’s something to the effect of once every two years for all the supervisors and so forth and it’s like at least for two hours or so something to think about if you haven’t considered it.
MATT: That’s impressive because I’m watching you and you weren’t even reading off of anything. You hit all those numbers were correct.
NASIR: Yeah.
MATT: Good work!
NASIR: I wasn’t reading off anything.
MATT: Yeah, I could tell. That’s impressive.
I mean, for employers, it doesn’t matter what state but there’s two sides of the coin. There’s preventative which you mentioned training, taking reasonable steps to prevent all those things, and then reactionary.
NASIR: Like remedial.
MATT: Yeah, when you get some sort of complaint and all of it needs to be taken seriously because, as we’ve made the point here, especially if it’s a supervisor or manager, the employer could be held liable for this so it’s a big deal.
NASIR: Yeah, absolutely.
What’s happened thus far? So, they did an investigation. In fact, when they did the investigation, it was actually a law firm that interviewed Megyn Kelly and that’s how it actually came out.
MATT: Yeah.
NASIR: In the course of their investigation.
So, they obviously made a decision. They initially stood by Ailes but because of everything that kind of happened, they had to make a decision and I think Rupert Murdoch now is going to take his position as of today. That’s what I read.
MATT: As of when we’re recording, that’s the temporary. That makes sense. Ailes has been around a long time and you’re not going to just instantly replace him with somebody without doing some sort of extensive search, especially not now.
NASIR: Yeah.
MATT: I can’t remember if it was with this example or another one I was reading on but it might have been one of those situations where they basically were saying, “Either we’re going to terminate you or you’re going to resign, it’s kind of up to you.” I can’t remember if that was in this instance or not or if that was another case or another example I was reading.
NASIR: I’m trying to think of any of the other women because that’s what’s alluded to. I’m trying to remember if this was in the complaint. The plaintiff, she actually alleges that other women who may have so-called welcomed some of the sexual advances may have had some perks or benefits while at FOX News which, of course, is interesting because, by doing so, it kind of throws other people in the bus and we haven’t really heard much on that side of things – in other words, those that actually complied with that.
But you mentioned the type of quid pro quo type of harassment and there are two kinds. There’s the quid pro quo meaning you do this and you’ll be rewarded for it. in other words, you become welcome to my sexual advance and you’ll get a raise, you’ll get X, Y, and Z. And then, there’s that kind and there’s also the kind of hostile work environment. Gretchen Carlson, she has allegation of both. They don’t specify it in this way but it seems like the allegation, even though this lawsuit is not against her co-host but the comments against Steve Doocy seems to be more of the hostile work environment kind of allegation whereas Roger Ailes seems to be more of the quid pro quo and hostile work environment both because he makes that comment about “okay and then you’d be good and better and I’d be good and better” seemed to imply that you’re going to be rewarded somehow.
These two types of differentiation, it is important to note the difference but one big difference is that, when it comes to hostile work environment, it may not just be one single act that creates the environment. It could be repetitious in the sense that maybe one joke or comment on one day is not a hostile work environment but, if it’s a comment every single day, that might be a problem. So, it’s hard to think of a perfect example because, again, this is all by case by case basis but a comment about how someone looks on one day could be okay but, if it’s every single day, then, “Wait a minute, this is so-called getting creepy, right?” and it comes back to that unwelcomeness.
MATT: I think, in a lot of these instances, the line is pretty blurred between the two different types of sexual harassment.
NASIR: You’re right. It’s often both.
MATT: Yeah, especially when it’s clear quid pro quo. It’s very easy for it to also kind of bleed in the hostile environment as well. I mean, it just kind of almost goes hand in hand. It makes sense but, like you said, there is reason to distinguish between the two.
NASIR: In the law, it’s a big deal because, in the hostile work environment context under the federal law, it’s actually an objective standpoint or standard that is a reasonable person and those lawyers listening understand what I’m saying. Basic difference is that we’re talking about a reasonable person and that circumstance is which is the same in every single environment that it may be so-called hostile where the unwelcomeness is very case by case.
MATT: We’re catering to the employers so we need to help the business owners.
NASIR: That’s true, and I’ll tell you this – allegations of sexual harassment are some of the toughest things to deal with as an employer – even for us on the legal end – whether it’s true or not true. Sometimes, it’s even more difficult if it’s not true. I could just share personal experiences. I’ve had circumstances where based upon what was originally presented to me, I was pretty sure it didn’t happen until other evidence was presented to me that made it certain that it did. Point being is that, when this is put in front of you as a supervisor or as a manager or as a business owner, whatever position you’re in, if this is reported to you, even if you have your doubts, you have to take it seriously. You’ve got to do your due diligence. You’ve got to go through your process. There’s plenty of literature on how to do this. There’s plenty of lawyers besides us that know how to deal with these things but creating the policies, the proper policies and having that so-called open-door policy becomes important because what happens if the supervisor is the one that’s doing it? The subordinate of that supervisor should feel open to going above that supervisor or to someone else – whether it’s an HR representative or even a fellow employee to try to resolve the situation.
MATT: Those are the tough situations for the employees if it’s actually happening is if it is a supervisor who’s doing the unwelcomed acts or if it’s like, in the smaller companies, someone who’s kind of the main person in charge and also the HR and all that. It’s like, “Well, how do you necessarily approach them? Are you going to approach them and let them know of their own allegations of sexual harassment?”
I think you’re right. The times when it is truer are probably easier because you just likely justifiably just terminate the person.
NASIR: Yeah.
MATT: The ones that are untrue, it’s a lot thicker – no, thicker’s the wrong word – trickier?
NASIR: Trickier, yeah.
And so, if you’re an employer and are concerned about this and if you haven’t thought about it yet, start thinking about it. there’s a lot of things you can do besides what we’ve talked about as far as training and preventative acts and having all the compliance stuff of having a handbook and so forth. You could also get EPLI insurance which is employment liability insurance employment? What does the P stand for? Oh, employer protection liability insurance I believe it is. I’m probably wrong with what the P stands for but anyway…
MATT: Employment practices liability insurance?
NASIR: There you go. EPLI. Most EPLI policies will cover – if not all – these kinds of allegations and it’s a good safeguard, especially in California, a supervisor may have no propensity to do so. They may go through the training. They may have not had no prior acts, passed the background checks, and sexual harass one of their subordinates and then, all of a sudden, the employer’s responsible.
MATT: Right.
NASIR: And so, another thing to think about and to consider – moving out of California.
MATT: You already did.
NASIR: I know. I didn’t move all my clients there. I tried to get some of them out but unsuccessful.
MATT: I spoke with somebody today who recently moved their business out of California early this week to Colorado. He said, “Yeah, it’s $50.00 to file for a business like $10.00 annually.” I mean, that’s just the financial aspect of it. I was like, “Yeah, it’s pretty well-known the cost of doing business in California is excessive.”
NASIR: That’s a whole show, top-down. I mean, you have $800 franchise fee then you have the employer liability, the state taxes. But, anyway, that’s the sun tax if you choose to live in California but we’ll help you figure that out if we need to.
MATT: Yeah, a topic for another day.
NASIR: Yeah. All right. Well, I think that’s our episode. So long to Roger Ailes and his FOX News Company.
MATT: I guess that’s something we should mention, too. I think I saw that he’s not allowed. He’s gone from FOX but I don’t think he’s allowed to work with any competitors as part of the deal. They said he was going to work as a consultant but not in an official… He’s going to consult but not in an official consultant’s capacity to help find his replacement which is kind of weird.
NASIR: We should hire him as a sexual harassment trainer. I mean, we’d get to say, “Okay, what did you do – assuming everything’s true? What did you do in your place as CEO?” and then we can just say, “Just don’t do that.” You know, perfect.
MATT: I’ll make the contact.
NASIR: I’ll send him an email.
All right, thanks for joining us.
MATT: Keep it sound and keep it smart!

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